Late Stage Socialism and the ever-Increasing Cost of Justin Trudeau’s Far Left Politics: Aggressive Bank of Canada rate hikes WILL add more strain on Ottawa’s debt servicing – November 3, 2022,
People tend not to comprehend the reasoning behind CENTRAL BANKING in relation to our modern monetary system; although the centralization of central banking lends itself for most to imagine that we’re living in a Marxian system, the reality is actually a little more complicated than that. Our current monetary system actually revolves around keeping GOVERNMENT SPENDING in check.
Whenever I write about government spending, I try to be specific and write EXTENSIVELY about government REGULATIONS, which most people CONFLATE with government spending, because the truth is, one of the main drivers of POVERTY worldwide is government regulations on economic activity. Now, I’m not against all regulations; as an example, I don’t want some profit-seeking capitalists to dump poisonous toxic sewage in pristine waters for their personal profit; I definitely want my GOVERNMENT to protect me from this, but where I have a problem with REGULATIONS on the economy is when the regulations revolve around MONEY.
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As an example, two financial regulations I really hate are the minimum wage laws and the rent control laws. Both of these FINANCIAL regulations create SHORTAGES. The minimum wage creates SHORTAGES of manufacturing and low-skilled jobs that are now OUTSOURCED, and the RENT CONTROL laws create shortages of HOUSING.
The devasting effect of the minimum wage law is that it gives MILLIONS of Canadians an EXCUSE not to work and to also be on government WELFARE. Now, even if someone was making $1 an hour, that’s still $140 minimum per month for an 8-hour, five days per week work week. Now, if there was no minimum wage, the government would spend FEWER dollars on WELFARE spending because on both sides, job creators wouldn’t need bailouts, and even low-skilled workers, if we gave them some subsidy, it would cost the average taxpayer far fewer dollars.
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Now, with rent controls, I’d abolish that law altogether, and the only law I’d consider is NOT allowing any rental corporation to have a monopoly on housing. It’s unlikely a housing monopoly would emerge, but if one emerged, I’d definitely want it broken up, but one thing I would definitely abolish and make illegal al over Canada are rent controls; why? Because it leads to SHORTAGES of housing.
To better understand what rent controls do, I want you to imagine you’re selling LEMONADE. Imagine the GOVERNMENT told you that you were NOT allowed to raise the price of your lemonade beyond the government rate of 3% regardless of how much INFLATION government regulations created the economy. Knowing this, would you still sell lemonade?
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As an example, if the government raises the minimum wage by 5%, but you’re only allowed to raise the price of your lemonade 3%, you’re losing 2% of your profit. Now, imagine the company that sells your lemonade business lemons raises their prices by 5%, but because you’re in the GOVERNMENT CONTROLLED LEMONADE business, your prices can’t exceed 3%, and you’ll soon find your lemonade business filing for bankruptcy.
Rent controls create SHORTAGES of housing because the earning potential of owning a rental apartment is CAPPED; However, many will argue capping earnings is the right thing to do, the REGULATIONS on housing make housing a scarce commodity. Now, for the Marxians, they have a saying called “Late Capitalism” or “Late Stage Capitalism,” which is a period in which the Marxist imagine that they should take over the economy and allow the central planners to rule over society.
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In the minds of these types of Marxists, they assume that not only is a market economy, not that complex; these Marxists imagine that profit-driven business people can EASILY be replaced by Government Bureaucrats. By that, I mean most Left-wingers imagine that it’s super easy to replace a profit-driven capitalist with a politician or political figure.
Marxist do not believe in PRIVATE PROPERTY, or they have a skewed concept of property rights. So when I came up with the term “Late Stage Socialism” or “Late Socialism,” that was me countering their flawed idea. With Late Socialism, what I’m arguing is that the larger the government gets, the more likely society is headed for a period of AUSTERITY measures.
Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both.
In Canada as an example, I’m arguing that Justin Trudeau is actually FORCING austerity measures. If you see the world this way, you’re likely going to make wiser investments for your future. Under Pierre Trudeau, Justin Trudeau’s father, Canada went through a period of RAMPANT inflation and above-normal interest rate policies.
Pierre Trudeau, in practice, was actually more radical than Justin Trudeau; however, because a lot of what Pierre Trudeau fought for has YET to be reversed, Justin Trudeau has been given more RUNWAY to spend, tax, and regulate the Canadian economy. Although Canadians are worried about Justin Trudeau censoring the internet, the truth is that Pierre Trudeau censored Canadian television and radio.
Freeland to release mini-budget today as economists warn a recession is coming
| cbc.ca
In Canada and in many parts of the United States, a lot of people who grew up on biased Left Leaning radio and television have a hard time hearing or comprehending the voice of LIBERTY. One of the reasons Justin Trudeau, a left-wing politician who ADMITTEDLY wore blackface more times than he can remember, can constantly label his political opponents as racists is because a lot of Canadians have been brainwashed by the Canadian Radio-television and Telecommunications Commission (CRTC).
Most people in Western society they’ve been conditioned to imagine “conservatives” and “racists” as one and the same. These conditioned people have been taught to imagine Left Wing politics and “new age Liberal” leaders as their saviors. People on the Left imagine that they’re being nice to Conservatives by allowing them to exist. Once you understand that this is how Leftist think tanks have socially engineered people’s minds, it’s easier to see why a lot of Leftists forgive to Justin Trudeau for not knowing how many times he wore blackface well into his 30s.
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Now, if a conservative politician were to ever wear blackface when they were ten years old, CONSERVATIVE VOTERS would want that politician ousted; why? Because Conservatives comprehend the important role a politician can play in their standard of living, and where Liberals imagine businesses and business people are interchangeable, Conservatives imagine politicians as interchangeable, and this is EXTREMELY problematic for Conservative politicians because, unlike Left-wing voters, Conservative voters will QUICKLY through a politician under the bus, and use that politician for a speedbump.Most Conservatives associate POLITICS with SCUM!
I bring this up because this is why far-left politics tends to dominate, and one of the mechanisms in place to prevent the far left from destroying society under this modern monetary system is the central banks. Trust me; I get it; we’d be better off WITHOUT a central bank; however, this is what we have, and the design of a central bank is to prevent economic DEFLATION.
In the United States, the Central bank DIFFERED in that the U.S had a GOLD STANDARD, which meant that Franklin D. Roosevelt(FDR) had to con Americans into giving the Federal Government their gold. When Nixon severed the international convertability from U.S dollars to Gold, it wasn’t that big of an event because, DOMESTICALLY, Americans couldn’t exchange dollars for Gold, and internationally, most INDIVIDUALS weren’t demanding the U.S government give them gold for dollars.
What did become a problem in the United States and the world, however, were PRICE CONTROLS. The main culprit of consumer price inflation in the 1970s and 1980s was PRICE controls. The main reason FDR extended the great depression was because of PRICE CONTROLS. Price controls or REGULATIONS/taxes on money make price discovery extremely difficult for the private sector.
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Nixons gold shock video should actually be the Nixons Price control video, now a lot of people call Jimmy Carter the worst President in U.S history; however, in fairness to Jimmy Carter, the problem this very smart scientist President had was his lack of comprehension of price controls had on the U.S economy. Had Nixon not stepped down because of Watergate, Nixon would have been the destroyer of the U.S economy. Instead, Jimmy Carter took over, and because of Carter’s low financial IQ, Jimmy Carter made the U.S economy worse.
Ronald Reagan fires 11,359 air-traffic controllers | history.com
In all of this, however, the U.S central bank played a MINIMAL role in fixing the private sector, in actuality what fixed the private sector in the United States were the forced austerity measures under the Reagan administration, you see as Paul Volker raised the cost of borrowing on Ronald Reagan it made it EASIER for Ronald Reagan to as an example fire 11,359 air-traffic controllers.
Although people might not imagine Reagan firing 11,359 air-traffic controllers as austerity it was, it was indeed the central planers SHRINKING their balance sheet. The business of politics is the same as the business of the private sector; one of the reasons the Prime Minister of Singapore, Lee Hsien Loong, has investments pouring into his country is because of the COSTS he does NOT force on the private sector.
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In many ways, the Singapore government creates a BIDDING war to do business in their country, whereas in Canada, under the leadership of Justin Trudeau, he has to subsidize the private sector to do business in Canada. Since Justin Trudeau became Prime Minister in 2015, the central bank of Canada has been extremely accommodative, but it’s now 2022, and none of Justin Trudeau’s spending/investments has panned out, and making matters worse, Justin Trudeau’s war on fossil fuels is causing rampant consumer price inflation, which is DEFLATIONARY to the economy.
Deflation equates to INVESTMENTS drying up. What most people don’t understand about the private sector is that business people are usually comfortable taking out a loan as high as 40% interest, why? Because the idea of business is to be PROFITABLE, so when a business takes a out a loan at a high-interest rate, the plan is to be able to SERVICE the loan with PROFITS.
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So as long as the private business can SERVICE THE LOAN and the private bank is willing to lend the money, central bank interest rates can be as high as possible. On the flipside to this is the GOVERNMENT; you see, if the government in power ONLY seeks to engage in vote buying, and ignores growing the economy, there comes a time when the Central bank HAS to look out for the betterment of the economy.
I call the period Canada is entering, Late Stage Socialism because I think people overestimate the powers of the CENTRAL bank. The central bank is there to keep the POLITICIANS in check. Now, sure the politicians can change the monetary system but don’t be surprised if HYPERINFLATION becomes a problem at that point because one of the main reasons Argentina and Venezuela for example have FREQUENT hyperinflation problems is because their politicians changed the role of their CENTRAL BANKS.
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Tiff Macklem, the current Governor of the Bank of Canada, has surprised me; I was actually shocked that began raising interest rates, I knew it was supposed to happen, but i didn’t think he’d actually pull the trigger, now bed on my data, Tiff Macklem has to continue to raise interest rates until Justin Trudeau shrinks the size of government, but I don’t know if Trudeau will do this, because I assume Trudeau is trying to reign as Prime Minister longer than his dad, meaning that Trudeau will want to be leader until 2025 at the very least.
So if Trudeau maintains his current war on fossil fuels, I don’t see how Tiff Macklem will be able to stop raising interest rates. I mean, sure, Tiff Macklem can stop raising rates, sure, all the central bankers can stop raising rates, rewarding more government spending, but because the COST OF DOING business is not coming down for the Canadian government, more stimulus spending by the government will buy FEWER votes.
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You have to also remember that vote buying doesn’t stimulate economic activity, meaning that Justin Trudeau will basically be burning cash, and I assume Tiff Macklem has to charge Justin Trudeau a premium to do this. I wrote about a year ago that Justin Trudeau would DESTROY his father’s legacy, and the reason I stated this was because Pierre Trudeau was smart enough to EXIT politics before his bad ideas started to destroy the Canadian economy.
I wrote about Jimmy Carter in this post; well, in Canada, former Prime Minister Brian Mulroney was Pierre Trudeau’s Jimmy Carter. Most Canadians have NEGATIVE feelings towards Brian Mulroney, who was clueless that Pierre Trudeau’s regulations on the Canadian economy required AUSTERITY measures. In fact, it was Jean Chretien’s Liberal Party of Canada in the 1990s that introduced austerity measures.
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If you ever wonder why people like me appear to be bipartisan at times, it’s because if a politician is financially ILLITERATE, it doesn’t matter whether they’re Liberal or Conservative, Democrat or Republican, the economic and financial devastation they’ll cause will be the same. Anyway, in closing, higher debt servicing costs should worry Trudeau because he appears INCAPABLE of making any sustainable profits for the Federal government of Canada.
Since being in office, all Trudeau has done is increased the deficit, so if he was dependent on PRIVATE bank financing, Trudeau would have already bankrupted Canada and would likely have NO buyers for his debt. If we’re to be honest, Tiff Macklem is actually being extremely nice to Trudeau. Currently, Tiff Macklem has Canadian interest rates lower than Federal Reserve is that interest rates in Canada are above 8%, and Tiff Macklem has rates at 3¾%. I’d argue Tiff is being as nice as he can to Justin Trudeau.
We’ll see if Justin Trudeau takes Tiff’s kindness for weakness! or if Tiff mistakenly lowers or pauses interest rate hikes to give Trudeau permission to continue burning cash.
Interesting times ahead!